Good morning. Thanks for joining us this morning so early. My name is Robyn Karnauskas. I’m the Deutsche Bank biotech analyst.

Next we have Greg Schiffman, the Chief Financial Officer of Dendreon. For those of you listening to the webcast and want to ask questions anonymously, you can go to yorn.com, yorn.com/hc and on this website, you can ask questions, we see them on the panel, we don’t know who is asking them. So ask away.

And with that, I’ll turn it over to Greg.

Greg Schiffman

Thanks very much. We’re pleased to be able to present here today. We’ll walk through fairly quickly a corporate presentation and then open it up, so at least the second half we can have an interactive Q&A. I do want to thank Deutsche Bank and in particular, Robyn, for inviting us to their conference. Do want to remind you that the presentation and discussions here will include forward-looking statements that are subject to risks and uncertainties and to find about more about Dendreon’s specific risks and uncertainties, please reference our SEC filings.

Dendreon, oncology-based company, as most of you probably know. We really have been focused on advancing the war on cancer, specifically in bringing a new form of therapy to market. It’s referred to as an autologous cellular immunotherapy. We would say it’s the first really large-scale personalized medicine, where it is actually personalized not in a diagnostic-based or molecular test, but truly taking the patient’s cells, processing them and reinfusing those cells back, harnessing the patient’s immune system to fight their cancer.

We had our quarterly call yesterday and we disclosed that our Q1 product revenues were about $82 million. So sequential quarter-on-quarter growth of about 6.5% increase over Q4. We’ve seen growing physician interest and I think confidence in PROVENGE. As of March 31, we had more than 570 accounts that have infused the product. We’ve got a target of around 1,000 accounts that comprise about 80% of all the prostate cancer patients and so we’re about 60% penetrated into the account-based target that we’ve got.

Our focus in 2012, continuing to add accounts, but more importantly, really increasing the utilization within those accounts. We have extremely large, as well as small accounts that we’ve signed up, the majority of them have been behaving all as small accounts, where they’ve been putting on one patient, two patients waiting for reimbursement.

A piece of positive news we did share in the call yesterday was the fact that, if you look historically, we’ve said how – we’ve been focused on growing accounts, but our large accounts have always been the academic centers that we had signed on very early on into the launch. Yesterday, we had discussions that in both the community setting for oncology and urology, we’ve had some of the large potential customers, it is a few at this point, but went from being some of our smallest accounts to absolutely our largest accounts.

And so it’s the trend that’s absolutely critical. We’ve had a few that have moved there. Certainly the focus over the rest of this year and next year is continuing to penetrate into the other large potential accounts that we’ve got, and we’ll discuss some of the specific things we’re doing there.

So we do think this is a large commercial opportunity. Prostate cancer, certainly an extremely exciting space, and a lot of activity taking place. So we think our product is uniquely positioned.

This is the Kaplan-Meier curve on the approval, 4.1-month median survival benefit. And this stays separated. You can see it separates at about 6 to 8 months and stays separated for almost five full years. Risk and reduction of death 22.5%.

Median survival benefit of 4.1 months is often a difficult number. It is a point where half the patients have passed away, half are still alive. I think we’re dealing with, on average, about 72-year-old men in the clinical study. A lot of them dying of things unrelated to prostate cancer. And so as you look out, and if we pick the three-year point and see that about – you have about a 38% better chance of being alive if you’ve taken PROVENGE versus the placebo arm.

And I think this is what really excites the patients because it is a demonstrated survival benefit. When you look at metastatic setting, there’s only a couple of drugs that have ever shown a better median survival than PROVENGE’s 4.1 months. It’s 30 days, and you’re done with the course of therapy, and the side-effect profile is very favorable, and at the end of the three years, you have a much greater probability that you are alive.

The safety profile, adverse events, the most common ones, chills, fatigue, fever, back pain. Typically very low grade, lasting 1 to 2 days following an infusion. So a 30-day course of therapy, very favorable safety profile, demonstrated survival benefit – these are really the factors that we think make PROVENGE interesting to both the physicians and the patients.

So you look at the prostate cancer landscape, it’s certainly a landscape that is going to change over the next couple of years. Currently PROVENGE and Docetaxel, chemotherapeutic regimen are the only two approved in our label.

We’re certainly positioning PROVENGE as frontline therapy. First, it’s the only therapy that’s not an ongoing systematic therapy – you complete it in 30 days. Taking PROVENGE does not preclude moving to any other course of therapy, and it has a very strong, demonstrated survival benefit, with the favorable safety profile.

I think that you will continue to see, over the next couple of years, some of the investments that were made about a decade ago starting to come to fruition. And the real question within prostate cancer I don’t think is what drug, but what’s the sequencing of the drugs, and how are you best going to use these to treat the prostate cancer. It’s an exciting time for both physicians, patients and we think Dendreon.

Our key areas of focus going forward is increasing the utilization of PROVENGE within the accounts, as we’ve talked about. Making it more effectively and efficiently so our cost of goods sold. And expanding the pipeline of data and expanding the product internationally.

We look at what we’re doing. Strengthening commercial execution, certainly the number one focus. Reimbursement, which had been a large overhang, I think is one that customers are getting comfortable with. We’ve had average time to payment now for probably about five months where it’s staying 30 days or less. Electronic reimbursement is working very smoothly. And so we see the reimbursement landscape one that is ripe, and I think that the customers are getting comfortable.

We’ve been optimizing the marketing message. We developed very distinct messaging for both urologists and oncologists, have been rolling the message out. I think it’s being well-received. We’ve been working with urology key opinion leaders to focus on getting them to isolate these patients earlier. This is probably one of the key areas, both ourselves and I think every new product that enter this space, as well as ones that are complementary, like Amgen’s new product. You’re in a mode where there is actively – think that a physician can do when you isolate that a patient is both metastatic and castrate-resistant.

Historically, they would never scan a patient with a PSA less than 20. You typically waited until he had some level of symptomology or PSA was rising very quickly or at an absolute high level, you can scan for mets and if you’ve found them, have discussions about potentially with chemotherapy as something he wanted to move towards. Today, there’s therapies at the moment you find that he’s metastatic, have value, and actually the earlier you treat the patient, lower tumor burden, probably the better the results.

From that standpoint we’ve had some proprietary research, where if you look at patients with PSA less than 20, which urologists are traditionally trained you never scan those patients because the odds of finding a met would be very low, which is absolutely true in general.

If you look at the patients that are castrate-resistant, so they’ve gone through hormonal therapy and they have rising PSA, 70% of all the patients with a PSA less than 20, do have a met, and with a PSA at around 10 or less, you get 50% of the patients. And so there is a strong motivation to get this education out, and get docs starting to scan earlier. The moment they see biochemical failure and if they don’t isolate a met, to do that every six months.

In addition, we’ve been focused in working with patient themselves from patient advocacy groups. We launched a program called PROPEL, which is a branded patient education series, where we get physicians educating the patients at local support group meetings, talking about PROVENGE, talking about the patients, how it works. And I think they’ve been received extremely well, both from a physician and patient standpoint.

From a sales force standpoint, we’ve been educating docs about the appropriate use of PROVENGE in their practice. More importantly, urology is a very important market segment for us, it’s been the fastest growing market segment that we’ve had and expect to continue to see growing at a very quick pace. We’ve built out a key account manager team to focus on the large urology practices. Urology is a more concentrated physician base than you see in oncology. You actually have a group of urology practices referred to as LUGPA, Large Urology Group Practice Association, that this group is very targeted or focused to be able to support at a national level.

And as we’ve said, focused on converting the existing accounts into much larger usage and that’s both getting greater patient throughput, as well as the physician base. Often when you bring an account on, there is one or two that are very active with the drug but there may be many other physicians in it that we haven’t spent time with and it really is penetrating those physicians and getting it more broadly adopted.

From a manufacturing, last year we really focused on getting our manufacturing infrastructure in place bringing the sites up. This year is focused on COGS reduction both due to volume growth, efficiencies that we expect to gain, but also automation and changes in our process.

The three key areas if I looked at outside of just volume growth and efficiencies, which I think we’re continuing to isolate, is electronic systems, which we’ve been working on for the last about a year, year and a half and will be completed this year, putting in a large-scale electronic batch record along, as well as linking a lot of our systems to the instrumentation so it automatically feeds the data into the systems. We’ll get some fair amount of efficiencies from this starting to affect next year.

Automating the test environment, which we expect to implement next year and then being able to automate at the hoods. So automating the manufacturing process of PROVENGE, which between the three of these will have a substantial impact in terms of the amount of labor required to manufacture the product.

So we talked about sequencing, one of the areas of question is really what is the right sequencing of the product, what’s the right timing and in particular, one of the products that we expect to see get positive data later – who actually has had positive data, that we expect to see it released later this year, so with regards to Abiraterone. And Abiraterone is a unique product in that it does require co-commitment use of steroids, given that we’re harnessing an immune system, the question is, it’s low-dose steroids, what’s the timing sequencing? How quickly can you start it? Do you really have to wait? These are all questions that we’ve never looked at closely.

And so we’re running a study where you’ll take patients, they’ll be randomized into one of two arms. One of the arms, you’ll take PROVENGE and you’ll start with Abiraterone after you’ve had your first leukapheresis or first treatment with PROVENGE.

The second arm, you’ll wait until six weeks after you’ve had your last infusion. We’ll be looking at a lot of the immune response monitoring data, the data that we have looking at CD54 up regulation, a potency metric that is correlated very closely with survival, looking to see, do we see any difference in the immune response data and the efficacy in terms of the immune response data between the two arms. Do we see anything that would cause us to believe that you’re getting a different level of treatment or effect, and based upon that be able to give some information to the market about potential sequencing of these drugs.

We’re establishing a foundation for global launch. We did file our MAA application in Europe and we’re expecting a regulatory decision, some point middle of next year and very shortly we’d expect to get the 120-day questions back. From a market standpoint, it’s an addressable market probably similar to that in the U. S., it’s a much larger market, if you look at the total number of patients. And then we look at the reimbursement challenges, we think the size of the market we can address is probably similar to here.

Market characteristics, very similar, urologists, medical oncologists involved with the treatment, significant unmet medical need. And one difference we will have is in Europe, we will be using contract manufacturing. And so our cost structure there from a COGS standpoint will always be more effective than what we’ve seen in Europe early on. Long term, we will probably see a slight difference in COGS over the long term because you will be working with a contract manufacturer, who gets a slight margin there. But it’s a much more efficient cost structure in place and we’re evaluating potential partner strategies in Europe. In addition, we are exploring the Japanese market opportunity as the next international expansion potential.

PROVENGE, just based on a platform technology, we use a recombinant protein, in the case of PROVENGE, prostatic acid phosphatase by changing the recombinant protein that we use, we can go after other indications. And if we look at the antigens that we’ve done work on, you’ve got DN24-02, which is using the HER 2/neu antigen. That is the product that is in the clinic today (audio gap) we’re running Phase II study in neo-adjuvant, studying for bladder cancer. We’ve also done pre-clinical work looking at CA9, which would have efficacy and potential efficacy in kidney, colon and cervical, and CEA with potential for breast, lung and colon. The goal is to get new product into the clinic each year for the next several years.

We do have a strong balance sheet, cash on hand at the end of last quarter was approximately $559 million. As we indicated our revenue was about $82 million last quarter. We did give guidance that for this quarter, we’re expecting again low single-digit revenue growth for Q2 with modest quarter-over-quarter growth following that. We expect to able to achieve a cash flow breakeven in our U.S. operations, with annual run rate of about $500 million net revenue, and at that point believe our cost of goods sold would be at about 50% with automation and the other activities we’re putting in over the next couple of years, continuing to see efficiencies in cost of goods sold eventually moving into the 20% to 30% range.

So as we look at, in closing, it is the world’s first autologous cellular immunotherapy. It’s a platform, we have the ability to move it to other indications and leverage the infrastructure that we’ve built.

The first year, full year of revenues did place it in one of the top 10 oncology launches, and so, although the launch has not met the expectations we had last year, it’s still been a solid launch. We’ve seen increasing physician interest and confidence in PROVENGE, just continuing signing on new accounts, as well as the fact that we have seen two of the accounts moving from very small to extremely large accounts over the last six months, establishing it as a foundation of care in the evolving prostate cancer landscape, really leading the field of immuno-oncology, which I think is going to be an exciting area as you look out over the foreseeable future. I think this is a wave of new technologies to be able to treat cancer.

And with that, we’ll open it up for questions.

Question-and-Answer Session

Robyn Karnauskas – Deutsche Bank

Any questions from the audience? We’ll I’ll start with one. So you talked about three levels of COGS reduction, electronic systems like batches, test environment and hoods, but can you talk a little bit – can you give more clarity around which ones will have the greatest impact, like I think you said before, hoods and maybe help us understand like when will we really start to see the COGS impact from automation?

Greg Schiffman

Sure. So as we look at cost of goods sold, I think all three of these are very meaningful to us in benefits. The hoods bring – automating our manufacturing process brings potentially the greatest benefit not in terms of the labor savings it brings, because I think that’s similar to what we see with some of the other improvements, but it is the ability to potentially generate far more revenue out of each of our manufacturing sites. You’re not going to decrease the time of manufacturing substantially but you can decrease the footprint required for that manufacturing.

And as such, you can do far more in the same amount of space, and being able to do that gives you an ability to be able to generate far more revenue out of a facility. That is one of the factors I think is, a lot of people have pushed and we’ve had discussions around, your thoughts with manufacturing facilities. It is one of the factors that could cause us to have to look at our manufacturing infrastructure because you may have far more capability in terms of ability to manufacture the product than you would need. And so I think that brings the greatest benefit for efficiencies, but I think all three of them are extremely meaningful.

On top of it, and I don’t want to understate, those are step function improvements, but as we look at efficiencies in just the manufacturing of the product, it’s important to think about sort of where the company is at in the maturity of manufacturing. Up until last year, nobody, not just Dendreon, but no company anywhere has ever done a manufacturing process like this. Actually, if you go back a couple of years ago, I think the majority of the questions that centered in investor conferences were the fact that you would never be able to scale this, you’d never be able to make this in scale and make it work and I think if you look at the success we’ve had, I think it demonstrates the abilities that we have in the manufacturing side.

We’ve hit every timeline that we’ve listed out there. We’ve had essentially no hiccups in the year and a half of manufacturing and distributing this product and scaling it up. But you did that on the basis of taking what you had done in clinical trials and literally just moving it into a large scale manufacturing structure. And as such, it wasn’t a tuned system, you couldn’t tune the system, because you’ve never done volume. We’ve had, about six months now, where we’ve been focused on how do we make the product more effectively.

We have isolated, as I would have expected, a tremendous amount of areas of efficiency that we can implement, some of those we’ve been able to put in place. I’d say a large number of them are actively being put in place. And I think you’re going to continue to see this over the next several years, because this is not a process that’s been fine-tuned, when you typically think of manufacturing for a decade of experience with a lot of companies, it’s in a very early stage of a learning curve.

Robyn Karnauskas – Deutsche Bank

Got it. And just to go a little bit deeper on that, so we want to put these automation processes in place, when do you start talking to the FDA about what’s required?

Greg Schiffman

You bet.

Robyn Karnauskas – Deutsche Bank

So are you starting that now or?

Greg Schiffman

Yeah. You certainly have early discussions with the FDA. As we look at the changes, electronic batch – all of these will require an FDA to come in and certainly inspect or validate the activities. However, I think there’s different degrees that you’ve got in terms of a risk profile. If you think about an electronic batch record, it’s something that all – I’d say, all large pharma and biotech companies have in place. It streamlines a very manual process and a lot of paper, it’s something that the FDA is very motivated to see you do. You have to show that the system is working and accomplishing its goal.

But you’re not touching the product, you’re not changing anything fundamentally, you’re just moving things, that instead of handwriting on a piece of paper and somebody putting a signature next to it and then another group that validates that everyone of those would sign, you now have that done automatically in a system.

When you look at automating the test environment, again the tests that we will be doing are the exact same tests we’re doing today. You’re not altering or touching the manufacturing process. What you’re doing is you’ve got a machine that literally – today, we have the vials, the vials go in and an individual is going to aloe quad or pull out. They’re going to run the test, they’re going to record the results.

You’re going to go in to a mode that an individual will load up a system that will then pull up the vials, scan the bar code, run the test, load the data in the system. So again, you have to validate and show that what you’re doing is the same, but it is the same test, it is the same procedures, it’s that the instrumentation is performing as intended.

Robyn Karnauskas – Deutsche Bank

Like a machine that does it for you?

Greg Schiffman

Absolutely. When you go into automated at the hood, that’s where there is a wide range that you could look at implementing and anything from taking something that’s very similar to your current process, but just automating the fluid handling in it, to something that at the extreme, with technology as we’ve seen it advance over the past few years, you can essentially have a system where you load on a consumable, attach on your product and it does the manufacturing and at the end comes a product that you’re able to put into an incubator, and so it’s a very closed kind of a system.

I think those of you having discussion with the FDA, we’re certainly doing characterization of the product. That’s the one and it’s why we’ve pushed out the expected implementation into 2014. There is more work because you are touching the manufacturing product, which is so important to our process.

And on that basis, we’re having early discussions with the FDA. Certainly, as you get further along, you’ll have more meaningful discussions, but you start having dialogue today with your concepts and where you’re going and getting feedback.

Robyn Karnauskas – Deutsche Bank

So how do you contract people to do that until you know what the FDA is going to allow? Like if you do a full closed system, I assume that you have to buy machines, and then you’d have to first know what the – if the FDA is like it’s okay.

Greg Schiffman

Yeah. Well, I think that there is processes you go through in looking at multiple alternatives, and you’re working more in a development environment and lot of that work has been things that we’ve been doing over the last year, year and a half. You’d move in to a prototype phase, where you get prototypes of a couple of the alternatives to characterization of the data and at that stage, you can get a good idea. Do you see the exact same results, you see everything the same and you can have some preliminary discussions at that kind of the state with the FDA of the data that you’re generating, get some of their thoughts with regards to the sufficiency and how you might move forward. So I think there is a couple of break points as you move through this process.

Robyn Karnauskas – Deutsche Bank

Do you feel like the FDA is open right now at this point to either to close, which is pretty remarkable, that would be really remarkable or something that’s a little bit less different from what you’re doing, where you automate some process – are they open to both right now?

Greg Schiffman

I think that they are – I think by nature, the process that we have is a very good process. We’ve got a lot of great people performing it. Some of it has been very repetitive types of activity and I think the FDA to the extent that you can automate some of those activities, I think that they do see that in a very favorable light. I think it’s too early to have comments one way or the other outside of that, because I think the key is going to be how you see the process and the comparability of the results.

Robyn Karnauskas – Deutsche Bank

I think we’ll know by next year. We’re sitting here at the Health Care Conference next year and Dendreon is a $100 stock. So you think you’ll have a sense by then because you’ll be – or maybe is it more late 2013? I assume at some point, you’ll know what the FDA wants. It’s more about validating the data.

Greg Schiffman

You bet. As we look at the process, I would certainly say end of next year, you’re going to have a very good sense. I don’t know that I’d characterize whether it’s earlier than that. But we’re looking at having this implemented the following year, and that would involve having machines made, put in, and so forth. And so you’d have to have a very good sense by the end of next year.

Robyn Karnauskas – Deutsche Bank

Okay. And then just a follow-up on the test environment. So automation. Will we actually be able to see a COGS improvement from that specifically?

Greg Schiffman

Absolutely. I think each one of these will have a COGS improvement.

Robyn Karnauskas – Deutsche Bank

Including the first one? Because that’s just staff, right? Just staff?

Greg Schiffman

Well, it affects – yeah, it affects the efficiency of our operation. I mean, there is a tremendous amount of activity today on generating the paperwork associated with the manufacturing that you have to have, so that when the FDA comes in and audits you, you have a batch record or a trail for every dose that you’ve manufactured. And from that standpoint, being able to automate that gets us a lot of efficiencies in those labor components.

Robyn Karnauskas – Deutsche Bank

Got it. And then last question on manufacturing. So you’d said, when you first launched the product out in New Jersey, that you could treat 5,000 to 10,000 patients. So when you’re talking about automating the hood system – well, first of all, if you – will the test environment change how much you can produce? Or is it just the hood – changing the hood automation that changes how much you can produce out of a facility?

Greg Schiffman

Yeah. I think when you look at the ability to produce out of a facility, the only one that has any meaningful impact is going to be automation of the hood. And it’s not speeding the process, it’s decreasing the footprint associated with the manufacturing.

The others are all efficiencies. They’re extremely important, but they’re not ones that are going to dramatically alter the layout footprint or others in the facility, at least based on our expectations today.

Robyn Karnauskas – Deutsche Bank

And when you think about communicating this to the street, since there is so much of focus on getting your costs down, do you think that you’ll be able to communicate that to the street this year or do you think you need more time to work through some of – like the questions around closed systems or automated systems to communicate that would be more likely next year?

Greg Schiffman

I think as we look at manufacturing, it is one that, throughout the year, I would expect we’re able to give reasonable updates on the progress, what we’re doing. It is, I think, a strong focus in the street. Appropriately so. Very strong one inside.

We have a near-term goal, which is the point when our revenue hits around $125 million in a quarter, so we’re at a $500 million run rate, looking to see our cost of goods sold at around 50%, which is a fairly substantial reduction from where we are today.

Now one thing that’s really important to realize is, when we look at that number, at that $500 million run rate, that’s assuming sort of efficiencies that would be gained through that time period.

Now if I had – just go with the status quo and said there was no other changes, and you looked out a couple of years after that, so you’ve implemented the automation, our cost of goods would continually be dropping, without any additional volume. There are a lot of efficiencies we gain that are being gained over time as we implement automation into our manufacturing. We don’t expect that automation to be in place yielding results at a point in time when we achieve that 50% cost of goods sold.

Robyn Karnauskas – Deutsche Bank

Does the 50% include reducing the first one, the batch automation? Basically electronic systems?

Greg Schiffman

I think that it had some efficiency improvements, and to some degree, there is probably a little bit associated with the batch record, yes.

Robyn Karnauskas – Deutsche Bank

Got you. Okay. Any questions on manufacturing?

Greg Schiffman

Yeah.

Robyn Karnauskas – Deutsche Bank

Okay. Anything. Sorry.

Unidentified Analyst

Just wondering what’s same-store sales growth right now? How do you estimate that?

Greg Schiffman

Sure. So if we look at same-store sales, and actually, I think we shifted the view. One item, up until this quarter, we always had to talk to same-stores. We’ve gone to a same account, which we think is the meaningful metric, it’s something we were unable to provide previously.

(inaudible) we’ve got accounts, and some of those accounts have 50 physicians in an account, and they may have several locations. You don’t really gain access to a larger patient population, as they open up additional sites, necessarily. Because they may have been funneling all their patients to a single site. And so you’re having some diffusion as you look at same-store sales using sites as opposed to accounts.

With the account data, I think our sales are pretty well-defined. We give the net numbers, we give all the backdrop. It gets you to a gross sales. And if you sort of divide that by 31,000, you get to an effective number of patients that you treated.

If we looked at our account mix – I think on the call, what we indicated yesterday is in the large accounts, we have seen a trend in increasing same-store sales. And in a few of those accounts, a very dramatic increase over the last six months.

If we look at total same-store sales, they had been decreasing rapidly as we launched the product because we went from accounts that were relatively large accounts in academic centers with a lot of new accounts coming up that we’re treating on average, sort of one patient about every 2.5 months.

If we looked over the last six months, they’ve decreased just slightly, if you take total same-store sales. So we’ve seen a slight decreasing trend with a growing same-store sales in large accounts.

Academic, probably a slight decrease because they held very constant in dollars, but we’ve signed up a few accounts. I think academic, we do see more lumpiness than other areas, depending upon if there is a new clinical activity happening in one of the centers, which can draw a lot of patients into that clinical trial.

But overall, slight decreasing, if we take all the accounts with the new ones we continue to sign up. Little growth in larger accounts. Certainly long-term, that is the number-one metric is increasing growth in these same accounts.

Robyn Karnauskas – Deutsche Bank

Other questions?

Unidentified Analyst

So when you talk about small accounts growing into the bigger accounts, what actually worked in those accounts? Or do you – could provide some details?

Greg Schiffman

You bet. So we’ve got a lot of very large accounts. And I think for many of those accounts, when they come on board, one of the first concerns that they have is centered around reimbursement.

And so there has been a lot of anxiety. If you look last year, we did have an NCD that put some questions – we did do that – get resolved.

But this is about the only product – the total cost of the therapy say is in line or actually lower than a lot of other metastatic disease. It’s $93,000 for the full cost of therapy. However, if you look at that in terms of the time period that the cost incurred over, typically these therapies are going to be anywhere from a 7-month to an 18-month course of therapy. So you’re looking at something maybe $5,000 to $10,000 a month.

In our case, the entire cost of the therapy happens in one month. And so from a physician – and it is a Part B drug. So this is one that the physician does buy, and then he gets the reimbursement. It’s not a script where he’s writing a script, and then they go off and they get it filled at a pharmacy, reimbursed through another means.

On that basis, many of the docs had expressed that they did want to see reimbursement working smoothly. They didn’t want to put on five, six patients, find that they had reimbursement issues with some of the patients, because it is a very large, out-of-pocket downside risk.

I think for these accounts, they got comfortable with the reimbursement. The environment is working very smooth. Once you get outside of that, I think it’s a little bit how they are going to adapt it in the practice. I think some of it, we did a better job of getting it spread through all of the physicians in the practice, as opposed to getting a couple of champions moving off. And I think that’s one of the strong focus that the sales force has is working with these accounts to make sure that all the docs have been touched. That we know and had experience to educate each one of them, not one or two individual doctors within a practice.

And they’ve gotten comfortable in the adoption of an immunotherapy, so an infusion-based drug in their practice. And for the oncology sites, that was a low issue. But for urology practices that haven’t done a lot of infusion, that’s really the third barrier.

What we’ve seen is for all those accounts, they’ve really gotten comfortable with those three. They see it as a great alternative for their patients. A very meaningful therapy. And they’ve really ramped up prescribing to a broad base.

Robyn Karnauskas – Deutsche Bank

Within – I think it’s 18 LUGPAs – what percentage of them have you penetrated?

Greg Schiffman

So LUGPA accounts, I think there is around 100 total LUGPA accounts. And I think we are over 50% penetrated in the LUGPA accounts, in terms that they’re actually infusing PROVENGE.

We’re continuing to move forward with the rest. As we indicated, we have got a key account team focused really just on that LUGPA group, looking at them as national accounts. Because these are all sites where you have to have least 10 physicians in the site to qualify to be a member. So they are all good-sized offices. And so I’d expect you’d continue to see that growing.

When we say penetrated, though, I would really step back. It’s penetrated. It has been the fastest-growing segment, urology, for us. But still a majority of the LUGPA accounts are not treating the base of patients that they have on an incident level coming in.

Robyn Karnauskas – Deutsche Bank

So like for example, if some of the centers are structured where they have like 60 physicians that feed in, do you have one guy giving PROVENGE and then everyone is referring in, or are you trying to actually get all those guys to give PROVENGE?

Greg Schiffman

I think in most of them, they’re centering it down that it’s one or two individuals actually treating them.

But I think what you want to make sure is each one of them is working with patients. And you want to make sure they’re all educated on the benefits, how the drug works, so that they are all referring them actively into the one. That these practices are ones that the economics are shared through the partners. They typically are specializing in having one or two people that are focused on administering the drug.

Robyn Karnauskas – Deutsche Bank

I think last question. My last question is – and the number-one question I got last night, after the conference call, was more about is there upside for this year? Or are we just sort of – this year is sort of a transition year, and then sort of next year you have your COGS improvement, so you start to see results of the effort from sales? Do you think that things could recover sooner than you expected? And if so, what might be the reason for that? Like, what are the things you’re looking forward to sort of...

Greg Schiffman

So I guess when I look at – when I think about upside, maybe if there’s two components. On the COGS side, I expect to continue to see COGS going down and actually I think if we even look over the last six months, I mean my cost of goods sold up until Q4, we are over 100%. If I did an apples-to-apples comparison and we haven’t had antigen flowing through our cost of goods sold. It’s the key, most expensive raw material component for us. We’ve been using antigen that was purchased in an R&D phase and so last quarter, for the first part, we had antigen start to flow through and it was about $2 million.

If you do an apples-to-apples and just pull the antigen out, so you’re looking consistently at what hit COGS, we’ve gone from over 100% down to 71% in this six month period of time. I think that’s a pretty substantial improvement in cost of goods sold, it’s almost, it’s over 30 points.

I think as we look at moving forward, you’re going to continue to see improvements in cost of goods sold through this year and continuing for the next couple of years, as we move from, it was 73% with our GAAP reported COGS and this quarter, it might go up slightly, just because you will see antigen flowing through the entire quarter through all the facilities. That is the last point. If there is anything new entering COGS, it’s just going to drop after that. And so I’d expect to see good reductions this year, continuing on for the next couple.

From a revenue standpoint, I think we guided low single digits for this quarter. There is a lot of uncertainty. This is the first quarter we’re ever seeing what the order trends or patterns might be. We’ve got some questions around AUA and ASCO, if you have key docs, who are the ones that treat the patients, if they are out, is that going to impact volumes, we just don’t know.

And so we are being cautious in the guidance, there definitely is lumpiness in the order trends and patterns. And I think over time, you will see that start sorting. And John had guided that he did expect to see us with modest growth for each of the remaining two quarters. I think the key is we have seen a couple of the accounts move from very small to very large, we need to continue to do that with a larger base and I think that you will continue to see that, the real question is the speed that that happens this year.

Robyn Karnauskas – Deutsche Bank

Got it. Thank you very much.

Greg Schiffman

Thank you.

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